Over 40 banks in Germany have declared interest in offering cryptocurrency services following new regulations in the country.
German Banks Declare Cryptocurrency Intentions
Several banks in Germany have told the country’s financial regulator, BaFin (Federal Financial Supervisory Authority), that they are interested in providing cryptocurrency services under the new rules. The new German law became effective earlier this year and allows banks to offer cryptocurrency services when they obtain a license from the financial regulator.
According to BaFin, they have received over 40 expressions of interest from banks across the country. These banks are seeking approval to operate a crypto custody business in the future. A spokesperson for the regulatory agency noted that expressions of interest are not the same as applying.
He added that the regulatory body had previously told companies that are providing crypto custody services that they are under the regulations of BaFin. As a result of this, they are required to submit informal, non-binding expressions of interest. However, he didn’t comment on the exact number of banks that have submitted an expression of interest so far.
This comes as the new German Money Laundering Act became active earlier this year. The regulation allows financial entities to offer cryptocurrency investment products to their customers. These products will now join the others provided by banks including stocks and bonds products.
No Immediate Response Tothe Declaration of Interest
BaFin pointed out that financial institutions that submitted expressions of interest will not be granted immediate acknowledgment of receipt or an assessment of the information presented. Furthermore, declaration of interest doesn’t replace the formal notification of intent according to Section 64y KWG.
The regulator added that on the 1st of January 2020, the law implementing the amendment to the Fourth EU Money Laundering Directive, came into force. Based on this, all companies will be subject to the amended money laundering law as of the 1st of January 2020, irrespective of the date that they submitted their notification of intent.
Some Banks Already Offering Crypto Services
Cryptocurrency services are already available to some bank customers in Germany. SolarisBank in Berlin is one of the popular banks already providing services in digital assets to its customers. The bank offers such services under its subsidiary, Solaris Digital Assets, which was launched in December 2019.
Solaris Digital Assets intends to obey the regulatory requirements of the German market and to ensure they follow all the guidelines regarding the storage of digital assets. In this way, their partners will not need to apply for licenses. If the bank successfully receives a custody license from BaFin, they intend to store Bitcoin and other cryptocurrencies for their customers.
SolarisBank is popular in the German banking community because it is one of the fully licensed banks that provide services to numerous German fintech startups. Michael Offermann, Managing Director for crypto banking activities at SolarisBank, believes that digital assets will change the financial markets. He added that they expect growth once it becomes more accessible for people to buy and store Bitcoin.
For SolarisBank, the new regulations make it a perfect time to start rolling out crypto products. The bank has been working on cryptocurrency custody for more than a year now and this could be the best time to begin practicing, Offermann concluded.